In Cuts, a Stroll Through Obscure Parts of Budget

By

Damian Paletta

March 2, 2013 9:20 a.m. ET

WASHINGTON—Some of the new budget reductions will hit parts of the federal checkbook that many Americans would recognize, such as a $276 million cut to the Transportation Security Administration's $5.52 billion aviation-security budget.

But other cuts are much more obscure, such as a $6 million cut to the $110 million budget for the Leaking Underground Storage Tank Trust Fund.

The White House's Office of Management and Budget on Friday night detailed hundreds of federal accounts that are subject to the new "sequester" reductions. These cuts are part of a rare across-the-board process that culls $85 billion in spending authority from defense and domestic programs over the next seven months.

The OMB said $42.67 billion of the cuts would come from military spending, $31.32 billion from nondefense programs, and $11.35 billion from Medicare payments to doctors and hospitals. It also offered a much more detailed breakdown of how the cuts would be apportioned, giving federal agencies, employees, contractors and vendors a window into what the potential impact might be.

While they represent just 2.4% of all federal spending this year, the cuts are concentrated into the final seven months of the government's calendar year and leveled at a relatively small portion of the budget. The Department of Agriculture alone, for example, has close to 70 accounts that will be affected. The Navy has 13.

The OMB's 83-page list of all the affected programs offers both a diagram of the cuts and a stroll through some of the more unknown parts of the federal budget.

The single-largest account reduction is the $5.75 billion cut in spending authority for the Federal Hospital Insurance Trust Fund, a part of Medicare, which has a $283.5 billion budget. The largest defense account affected by the cuts is the Army's $59.42 billion budget for operations and maintenance, which would be reduced $4.64 billion.

Contrast those with some of the smallest accounts affected. Payments to wool manufacturers, a $15 million Department of Homeland Security program, would be cut by $1 million. The $13 million Native Hawaiian Housing Block Grant program, run through the Department of Housing and Urban Development, would be trimmed by $1 million.

The OMB's report didn't detail how each federal agency might implement the reductions. It doesn't dictate whether agencies must furlough employees, cut grants or scale back purchases. Those decisions are left up to each department.

The design of some accounts leaves little wiggle room. The Air Force's $22.8 billion account for aircraft procurement was cut by $1.78 billion, a reduction that would likely prove difficult to offset by reductions in travel or office supplies.

How broadly did OMB direct the cuts? It added itself to the list of affected agencies. It will have to trim its own $90 million budget by $5 million.

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